The Globe and Mail reports in its Friday edition that Barrick Gold is considering a takeover bid for Newmont Mining Corp. The Globe's Niall McGee and Rachelle Younglai write that Barrick is actively working on a plan for a two-step deal that would see it take over Colorado-based Newmont for $19-billion in stock, then flip some of Newmont's assets to Australia's Newcrest Mining (all figures U.S.). There are still a number of hurdles. One of these is winning support from shareholders of Newmont. The company is attempting to close its own $10-billion acquisition of Vancouver miner Goldcorp, which was only announced last month.
Under the potential terms of the deal, Barrick would keep Newmont's Nevada and African mines, while Newcrest would take over its valuable Australian operations.
Newcrest is taking a very careful approach before committing. Barrick is also engaged in talks with other Australian miners who may end up buying the Australian assets. Newcrest operates mines in Australia, Papua New Guinea and Indonesia.
If Barrick were to successfully bid for Newmont, the latter's acquisition of Goldcorp would not proceed. However, Barrick would be on the hook for a $650-million break fee payable to Goldcorp.
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